U.S. Government Accountability Office

FRAMEWORK

FOR

ASSESSING THE

ACQUISITION FUNCTION

AT FEDERAL AGENCIES

September 2005

GAO-05-218G

Download this publication from GAOs Web site:

www.gao.gov/cgi-bin/ getrpt?GAO-05-218G

www.gao.gov/cgi-bin/getrpt?GAO-05-218Gwww.gao.gov/cgi-bin/getrpt?GAO-05-218Gwww.gao.gov/cgi-bin/getrpt?GAO-05-218G

PREFACE

Federal agencies are relying increasingly on contractors to perform their missions. With hundreds of billions of tax dollars spent each year on goods and services, it is essential that federal acquisition be handled in an efficient, effective, and accountable manner. The Government Accountability Office (GAO), howeveras well as other accountability organizations, inspectors general, and the agencies themselvescontinue to identify systemic weaknesses in key areas of acquisition. In fact, the acquisition function at several agencies has been on GAOs high-risk list, which identifies areas in the federal government with greater vulnerability to fraud, waste, abuse, and mismanagement. In January 2005, we added interagency contracting to this list.

Far too often, the result of poor acquisitions has been an inability to obtain quality goods and services on time and at a fair price. We can no longer afford such outcomes. Given current fiscal demands and the fiscal challenges we are likely to face in the 21st century, the federal government must improve its ability to acquire goods and services in a cost-effective manner.

GAO developed this framework to enable high-level, qualitative assessments of the strengths and weaknesses of the acquisition function at federal agencies. Such assessments can

help senior agency executives identify areas needing greater management attention, and

enable accountability organizations (including GAO) to identify areas requiring more focused follow-up work.

The framework consists of four interrelated cornerstones that our work has shown are essential to an efficient, effective, and accountable acquisition process: (1) organizational alignment and leadership, (2) policies and processes, (3) human capital, and (4) knowledge and information management. The framework supports an integrated evaluation approach, but each of these cornerstones can stand alone so users of this framework may tailor evaluations to an agencys specific needs. The table on page iii provides an overview of the framework. Using the table, readers can see at a glance how the framework is structured and can quickly identify specific areas that may be of interest.

In developing the framework, GAO consulted with federal government and industry experts in the areas of human capital, information management, financial management, and acquisition practices. Additionally, we drew upon decades of experience within GAO in reviewing each of these areas.

GAO-05-218G A FRAMEWORK FOR ASSESSING THE ACQUISITION FUNCTION AT FEDERAL AGENCIES i

We welcome any feedback you might have to enhance the usefulness of this framework. Please send comments by e-mail to frameworkcomments@gao.gov. I can also be reached at (202) 512-4841.

The framework was prepared under the direction of Bill Woods. Key contributors to this product were Lily Chin, Christina Cromley, Timothy DiNapoli, and Shannon Simpson.

Katherine V. Schinasi Managing Director Acquisition and Sourcing Management

A FRAMEWORK FOR ASSESSING THE ACQUISITION FUNCTION AT FEDERAL AGENCIES GAO-05-218G ii

http:frameworkcomments@gao.gov

FRAMEWORK FOR ASSESSING THE ACQUISITION FUNCTION

Cornerstones Elements Critical Success Factors

Organizational Alignment and Leadership

Aligning Acquisition with Agencys Missions and Needs

Assuring Appropriate Placement of the Acquisition Function

Organizing the Acquisition Function to Operate Strategically

Clearly Defining and Integrating Roles and Responsibilities

Commitment from Leadership Clear, Strong, and Ethical Executive Leadership

Effective Communications and Continuous Improvement

Policies and Processes

Planning Strategically Partnering with Internal Organizations Assessing Internal Requirements and the

Impact of External Events

Effectively Managing the Acquisition Process

Empowering Cross-Functional Teams Managing and Engaging Suppliers Monitoring and Providing Oversight to

Achieve Desired Outcomes Enabling Financial Accountability

Promoting Successful Outcomes of Major Projects

Using Sound Capital Investment Strategies Employing Knowledge-Based Acquisition

Approaches

Human Capital Valuing and Investing in the Acquisition Workforce

Commitment to Human Capital Management

Role of the Human Capital Function

Strategic Human Capital Planning Integration and Alignment Data-Driven Human Capital Decisions

Acquiring, Developing, and Retaining Talent

Targeted Investments in People Human Capital Approaches Tailored to

Meet Organizational Needs

Creating Results-Oriented Organizational Cultures

Empowerment and Inclusiveness Unit and Individual Performance Linked to

Organizational Goals

Knowledge and Information Management

Identifying Data and Technology that Support Acquisition Management Decisions

Tracking Acquisition Data Translating Financial Data into Meaningful

Formats Analyzing Goods and Services Spending

Safeguarding the Integrity of Operations and Data

Ensuring Effective General and Application Controls

Data Stewardship

GAO-05-218G A FRAMEWORK FOR ASSESSING THE ACQUISITION FUNCTION AT FEDERAL AGENCIES iii

A FRAMEWORK FOR ASSESSING THE ACQUISITION FUNCTION AT FEDERAL AGENCIES GAO-05-218G iv

TABLE OF CONTENTS

Preface i

Framework for Assessing the Acquisition Function iii

Executive Summary vii

Cornerstone 1: Organizational Alignment and Leadership 1

Cornerstone 2: Policies and Processes 11

Cornerstone 3: Human Capital 29

Cornerstone 4: Knowledge and Information Management 41

Appendix I: Scope and Methodology 51

Appendix II: Additional Sources of Information 53

This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

GAO-05-218G A FRAMEWORK FOR ASSESSING THE ACQUISITION FUNCTION AT FEDERAL AGENCIES v

A FRAMEWORK FOR ASSESSING THE ACQUISITION FUNCTION AT FEDERAL AGENCIES GAO-05-218G vi

EXECUTIVE SUMMARY

What this framework is

General guidance to evaluate an agencys acquisition function and to identify areas that need improvement

Consistent with and integrates existing guidance and standards

What this framework is not

A tool to evaluate specific acquisition actions, contracts, compliance with contracting laws and regulations, or a source of detailed assessment questions

A substitute or replacement for existing standards

Federal agencies have responsibility for a vast array of missionsassuring national defense, building and maintaining the nations infrastructure, assessing and collecting tax revenue, advancing scientific knowledge, and promoting the health and well-being of the nations citizens, among many others. To achieve these various missions, federal agencies use a variety of approaches and tools, including contracts to acquire goods and services needed to fulfill or support the agencies missions. Federal agencies award contracts worth over $300 billion annually. Acquiring these goods and services in an efficient, effective, and accountable manner is therefore essential. However, our workas well as the work conducted by the inspectors general, other accountability organizations, and the agencies themselvescontinues to identify systemic

weaknesses in key areas, which often result in cost, schedule, and performance problems on individual procurements.

GAO has developed this framework to provide senior acquisition executives, as well as GAO and other accountability organizations, an ability to assess at a high level the strengths and weaknesses of agencies acquisition functions. This framework comprises four interrelated cornerstones that our work has shown promote an efficient, effective, and accountable acquisition function: (1) organizational alignment and leadership, (2) policies and processes, (3) human capital, and (4) knowledge and information management. These four cornerstones are summarized below.

CORNERSTONE 1: ORGANIZATIONAL ALIGNMENT AND LEADERSHIP

Organizational alignment is the appropriate placement of the acquisition function in the agency, with stakeholders having clearly defined roles and responsibilities. There is no single, optimal way to organize an agencys acquisition function. Each agency must assess whether the current placement of its acquisition function is meeting its organizational needs. Committed leadership enables officials to make strategic decisions that achieve agencywide acquisition outcomes more effectively and efficiently.

GAO-05-218G A FRAMEWORK FOR ASSESSING THE ACQUISITION FUNCTION AT FEDERAL AGENCIES vii

CORNERSTONE 2: POLICIES AND PROCESSES

Implementing strategic decisions to achieve desired agencywide outcomes requires clear and transparent policies and processes that are implemented consistently. Policies establish expectations about the management of the acquis